Skyworks to Acquire the Infrastructure & Automotive Business of Silicon Labs

Rhea-AI Summary

Skyworks Solutions (Nasdaq: SWKS) has announced an all-cash acquisition of Silicon Laboratories’ (Nasdaq: SLAB) Infrastructure & Automotive business for $2.75 billion. This strategic move enhances Skyworks' capabilities in high-growth sectors such as electric vehicles, industrial control, and 5G infrastructure, aiming to tap into a combined market opportunity of nearly $20 billion annually. The acquisition is expected to close in Q3 2021, subject to regulatory approvals, and will bolster Skyworks' revenue and margin growth by integrating approximately 350 new employees and technologies into its operations.

Positive

• Acquisition value at $2.75 billion strengthens position in high-growth sectors.
• Access to a market opportunity of nearly $20 billion annually.
• Immediate accretion to earnings expected post-transaction.
• Expansion of capabilities in automotive and communications markets.

Negative

• None.

Skyworks Solutions, Inc. (Nasdaq: SWKS), an innovator of high-performance analog semiconductors connecting people, places and things, today announced that it has entered into a definitive agreement with Silicon Laboratories Inc. (Nasdaq: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, under which Skyworks will acquire the Infrastructure & Automotive business of Silicon Labs in an all-cash asset transaction valued at $2.75 billion.

Over the past two decades, Silicon Labs has developed the Infrastructure & Automotive business into a leader in each of its target markets, providing best-in-class solutions to a highly diversified customer base. The acquisition encompasses the technology portfolios and related assets of Silicon Labs’ power/isolation, timing and broadcast product lines, which are highly complementary to Skyworks’ connectivity portfolio.

The acquisition will accelerate Skyworks’ expansion into the industry’s most important growth segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication, data center, automotive, smart home and several other applications. Skyworks will be uniquely positioned to address a combined market opportunity approaching $20 billion annually.

Mark Thompson, senior vice president of Silicon Labs and general manager of the Infrastructure & Automotive business, will join Skyworks as part of the transaction, reporting directly to Liam K. Griffin, president and chief executive officer of Skyworks. In addition, approximately 350 employees, including the senior management team of the business, are expected to join Skyworks upon completion of the transaction.

“We are pleased to welcome the Infrastructure & Automotive team to Skyworks when this transaction is completed,” said Mr. Griffin. “This acquisition will broadly expand our capabilities across high-growth end markets including automotive, communications and industrial, creating new and highly compelling opportunities for Skyworks. By leveraging our global sales channels, operational scale and deep customer relationships, Skyworks is well positioned to drive above-market growth, while diversifying revenues, expanding margins and delivering strong returns in earnings and cash generation.”

“With our companies’ shared cultures of design excellence and customer collaboration, I am confident that the Infrastructure & Automotive team will continue their decades-long history of delivering industry-leading innovations,” said Silicon Labs CEO Tyson Tuttle. “Silicon Labs and Skyworks will partner to ensure a seamless transition for customers, suppliers and employees.”

Skyworks expects the transaction to be immediately accretive and to accelerate the path to Skyworks achieving its target financial model. The transaction, which is expected to close during the third calendar quarter of 2021, has been approved by the boards of directors of both companies and is subject to customary closing conditions, including regulatory approvals.

Skyworks expects to fund the transaction with a combination of cash on hand and committed debt financing arranged by J.P. Morgan.

Conference Call and Webcast

Skyworks will host a conference call with analysts today at 5 p.m. EDT. To listen to the conference call via the Internet, please visit the investor relations section of Skyworks’ website. To listen to the conference call via telephone, please call (844) 583-4549 (domestic) or (825) 312-2257 (international), Conference ID: 8392854.

Playback of the conference call will begin at 9 p.m. EDT on Apr. 22, 2021, and end at 9 p.m. EDT on Apr. 28, 2021. The replay will be available on Skyworks’ website or by calling (800) 585-8367 (domestic) or (416) 621-4642 (international), Conference ID: 8392854.

About Skyworks

Skyworks Solutions, Inc. is empowering the wireless networking revolution. Our highly innovative analog semic

FAQ

What is the value of the acquisition between Skyworks and Silicon Labs?

The acquisition is valued at $2.75 billion.

What business segment is Skyworks acquiring from Silicon Labs?

Skyworks is acquiring the Infrastructure & Automotive business segment.

When is the expected closing date for the Skyworks and Silicon Labs transaction?

The transaction is expected to close in Q3 2021.

How many employees will join Skyworks from Silicon Labs after the acquisition?

Approximately 350 employees, including the senior management team.

What markets will Skyworks expand into with this acquisition?

Skyworks will expand into electric vehicles, industrial control, power supply, and 5G infrastructure markets.